Home Business Ideas and Opportunities

Analyzing Potential Profitability of PPC Advertising

Pay per click advertising is a highly successful way to promote your online business and increase your sales.  However, like all other internet marketing tactics, pay per click advertising isn’t for everyone.  For this reason, you may be wondering whether or not pay per click advertising can help you.

 

To determine whether or not you can benefit from pay per click advertising, you need to examine the profitability of keywords, namely the keywords that you would choose to be associated with your ads. 

If this is your first time participating in a pay per click campaign, you may be wondering about keywords, namely what they are, what they are used for and how they will help you make some money.  When further examining pay per click advertising, you will see that all advertisements are associated with keywords.  Those keywords are matched up with keywords from various different online websites; the websites that choose to participate in a pay per click program. These keywords will also determine the amount of money that you will have to pay for advertising. 

When it comes to choosing your keywords, there are a number of important factors that should be taken into consideration. Those factors include relation and popularity. You will want to choose keywords that are related to your online business or the products that you are looking to sell. For popularity, you want to choose keywords that are popular or ones that are actively being used in search engines.  These two factors will help to ensure that your ads will not only be seen, but that they will be seen by the right people, your targeted market. 

Once you have determined what keywords you would like to use,you can then use a program that is often referred to as a keyword worth tool. One of these programs can be found by visiting https://ads.google.com/home/resources/using-google-ads-keyword-planner.  By entering in the keywords or the keyword phrases of your choice, you will be shown sample advertisements and how much they cost. This tool will give you an accurate idea of how much you can expect to pay for each keyword that you would like your advertisements to be associated with. 

As nice as it is to have an idea as to how much you would have to pay for a particular keyword advertisement, you may also be wondering if you can profit from that advertisement.  To do this, you will need to examine what you are trying to sell. If you are trying to sell a particular product, you will want to take the price of that product and subtract it from the estimated keyword cost that you were given, when you used the above mentioned tool or a similar one.  If you are just advertising your business in general, you will want to take your average sale amounts and subtract them from the estimated cost of your keywords. 

When using the above-mentioned formula to calculate the profitability of a keyword advertisement, there are some additional factors that should be taken into consideration.  For instance, the price of a keyword advertisement can change at any given time. This means that the price you have to pay may increase or decrease.  It is also important to remember that not all of your advertisement clicks result in a sale, but you will still be charged for each click.  To get a more accurate estimate of profitability, it may be best to prepare for non-clickers. In fact, you may want to assume that only five out of ten clicks will result in a sale. This may help to give you a more accurate estimate of the profits that you may see when participating in a pay per click program.

Although it is best if you can profit from pay per click advertising, you may still want to give it a try, even if you feel that you cannot.  With pay per click advertising, you are able to limit the amount of money that you spend each day. Being able to control the amount of money that you may lose is just one of the many reasons why you should give pay per click advertising a trial run.

Estimating the amount of money that you will have to pay for advertisements, as well as your profits, is a great way to determine whether or not pay per click advertising is for you.

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